StudentShare solutions
Triangle menu

Balanced Scorecard and Strategic Decision Making - Essay Example

Extract of sample
Balanced Scorecard and Strategic Decision Making

It reflects the following core principles: (1) No single measure can provide a clear performance target or focus attention on all the critical areas of the business. (2) The Balanced Scorecard seeks to minimize the common problem of information overload on business leaders by limiting the number of measures used. (3) The approach is a way to clarify, simplify and then operationalize the Mission (Purpose/Values/ Behaviours/Strategy) at the top of the organization (Johnson and Kaplan 1987). The Balanced Scorecard is a measurement framework and concentrates attention on the four primary perspectives of corporate performance. Each perspective focuses on a particular question fundamental to the future prosperity of the overall business (Kaplan and Cooper 1997).
Australian organizations have utilized different types of performance measurement covering financial, customer, internal and growth levels. From financial perspective, Australian organization use techniques to measure: profitability (Net Profit Margin and Return on Total Funds), Shareholder Income (Dividend Level and Dividend Cover), company's growth (Sales Trend (year on year growth)) and stability (Gearing (Debt: Equity) Ratio Interest Cover (times)). From customer perspective, it is possible to measure: Customer Care, quality, availability, brand values. From internal perspective, it is possible to measure Staff Retention and employees development, performance and communication. From growth perspective, it is possible to measure innovation and investment opportunities, creativity and company's performance (sales and profit) (Johnson and Kaplan 1987). For each of the Business Objectives the Strategic Key Performance Indicator (SKPI) represents the measurement tool. Related to each SKPI a stretching but achievable target level of performance should be set and clearly communicated to all relevant staff. To achieve this target, specific initiatives need to be identified, implemented and reviewed. The Balanced Scorecard therefore drives performance throughout the organisation. There is a direct line of integration between the Vision of the organization and the Strategy that is being pursued. It also provides the top level scoring' mechanism to ensure each aspect of the business is on-track' (Kaplan and Norton 1992).
The financial ratios are applied to the business to examine current achievement and trends. They can also be applied to competitors to enable external benchmarks' of performance to be established. There are many potential ratios available but these comprise those that would be regarded as a core set' designed to provide an overall insight into the business and the challenges facing management. They reflect the typical approaches used by corporate management, business analysts and bankers (Lynch and Cross 1991). The analytical ratios can individually be helpful in the review of past performance, future projections or competitor comparison. In addition there are several vital linkages that should be recognized to further enhance understanding and insight. From an internal perspective the primary driver of performance and success is widely acknowledged to be the competence and commitment of the workforce at all levels. Employees are generally concerned with two aspects: It is these five aspects of Quality, Cost, Delivery, Safety and Morale (QCDSM) ...Show more

Summary

Balanced Scorecard is one of the best approaches which help managers to analyze and evaluate performance ft he company and choose the best decision. This performance management technique highlights those factors that are critical to maintaining the strategic direction of a business…
Author : elmo31
Balanced Scorecard and Strategic Decision Making essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Balanced Scorecard and Strategic Decision Making"
with a personal 20% discount.
Grab the best paper

Related Essays

Balanced Scorecard
Balanced Scorecard Approach: A Critical Review (Name) (Tutor’s Name) (Date) Balanced Scorecard Approach: A Critical Review Introduction Balanced Scorecard is a strategic performance management tool, which is mainly used by managers to regulate strategy execution activities and subsequent monitoring processes.
8 pages (2000 words) Essay
Implementation of Balanced Scorecard by Citibank
The effective implementation of balanced scorecard calls for an effective control system that incorporates values, measures as well as other valuable measures that contribute to an organization’s overall well-being. By drawing upon sociological, psychological and economics studies on the selection and implementation of a balanced scorecard by Citibank
10 pages (2500 words) Essay
BALANCED SCORECARD
BALANCED SCORECARD WEEK 6 Executive Summary Balanced Scorecard is an important tool developed to measure the level of performance mainly of the employees in an organization. Procter and Gamble (P&G) is a reputed FMCG company which operates its business worldwide.
10 pages (2500 words) Essay
The Balanced Scorecard & the Financial Perspective
In the very the next year County Rehabilitation center got incorporated and started providing various services and today it is a multi faceted organization, serving hundreds of disabled people at more than 35 sites throughout Cattaraugus and surrounding county in New York States.
4 pages (1000 words) Essay
Balanced Scorecard & Tableau de bord
Abstract Presently much focus has been put on the strategic systems of measurement with the balanced scorecard being regarded and the best and the one that is highly rated. This approach that has its origin in the United States has not been received well in France whereby another system called tabuleau de bord has been in use for more than fifty years.
6 pages (1500 words) Essay
The Balanced Scorecard
It critically evaluates the use of the "Balanced Scorecard as part of modern business management accounting. In addition the paper tries to understand the way in which performance can be assessed in terms of financial and non-financial measures and to appreciate the use of modern methods of performance measurement.
8 pages (2000 words) Essay
Balanced Scorecard Implementation
Thus this study focuses on the needs and the subsequent problems, difficulties, issues and implications faced by organizations in implementing and integrating strategic information systems into the BSC framework through effective ERP systems. This research effort has particularly identified the existence of a positive correlation between an efficient ERP systems environment and the effective design, development, implementation and integration of information systems at the organizational level into the operational environment of the BSC framework.
22 pages (5500 words) Essay
Balanced Scorecard in Practice
There have been several studies conducted on the subject of Balanced Scorecard to develop the concept adaptable to the changing circumstances and needs of the organizations. This paper presents some of the facets of balanced score card and an account of the approach in practice.
6 pages (1500 words) Essay
The Balanced Scorecard In Practice
There have been several studies conducted on the subject of Balanced Scorecard to develop the concept adaptable to the changing circumstances and needs of the organizations. This paper presents some of the facets of balanced score card and an account of the approach in
6 pages (1500 words) Essay
The Balanced Scorecard as Performance Managment Tool
This paper discusses the role of Balanced Scorecard in terms of performance measurement and reviews its effects on organizations with respect to critical situations. The key features of Balanced Scorecard are discussed and from the analysis its approaches and trends are ascertained especially in critical situations.
10 pages (2500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation